Exploring collaborative contracting: Progressive design build

Table Of Content

• Progressive Design-Build: A Primer on This Collaborative Delivery Approach
• Phase 1: Preconstruction Services
• Waterfront Flood Mitigation Project Procurement
• A Microsoft Case Study: 7 Tips to Build Supplier Diversity in Capital Projects
• Setting Contract Price
• You Are a KEY Collaborator – It’s YOUR Project, So Your Input is Sought Throughout the Design Phase

Progressive design-build refers to a project delivery method that uses a qualifications-based criteria, followed by a process where the owner negotiates a design and contract price directly with the construction team. That means the owner usually retains the design-builder early in the life of the project and, in some cases, before the design has been developed at all. PDB is an excellent option for complex projects with design and/or construction challenges, where the design-builder can provide very early input on design or constructability issues. Complex projects also benefit from high level, intense collaboration and teamwork. As complex projects are difficult to price, PDB’s collaborative, open book pricing allows the parties to make more realistic pricing assumptions with a better understanding of the risks involved. Despite these features, there are key contextual factors and contractual issues involved in proceeding with the PDB model.

Progressive Design-Build: A Primer on This Collaborative Delivery Approach

The selection of the DB firm is based primarily on their qualifications and design proposal. Because the design and budget has yet to be determined, construction cost and schedule is not part of the bidding or procurement process. When challenged, people became creative and offered solutions to meet the operational needs. This helped the designers find new ways to simplify and detail the design to reduce costs.

Phase 1: Preconstruction Services

The uncertainty in defining PDB stems from the different ways PDB can be implemented. However, each of these variations are based on the same idea, and thus fall under the PDB umbrella. This same idea is also the key distinguishing factor between PDB and Traditional Design-Build (TDB). PDB also attempts to address other drawbacks one can confront in TDB delivery systems.

Waterfront Flood Mitigation Project Procurement

The PDB delivery method approved by the Board in October 2021 brings the contractor and their designer into the project early to validate the current design and collaborate with Metro and Third Parties on value engineering and construction costs. I believe this understanding of their project is due to the collaborative and early engagement provided by the progressive design-build delivery method. Campanella has completed $500 million in public and private design-build projects with Lydig, and nearly $750 million in design-build projects throughout his career. The Progressive Design-Build model is a form of early contractor involvement that can help reduce risk to all parties involved.

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Project Cost Negotiation

While a project design is usually 35 percent complete (or more) by the time a design-builder is procured in the traditional two-step design-build process, PDB adds the design-builder to the owner’s team even earlier in the design phase. When the design is somewhere between 50 and 75 percent complete, the design-builder issues a Guaranteed Maximum Price (GMP). The City contracted with Carollo in 2020 to serve as the Owner-Advisor for the Waterfront Implementation Project.

Significantly, this first selection phase is quick and less resource intensive for the competitors than a more typical design-build procurement selection. One step in assessing qualifications is to use a qualifications statement or questionnaire. ConsensusDocs was the first industry-standard qualifications statement specific to the design-build project delivery method – the ConsensusDocs 421. In addition, owners may shortlist competitors, typically the three most qualified teams, before moving to interviews and discussing technical proposals.

The common challenge with this approach lies between awarding the Design-Build contract and following through with its implementation. It's during this time that the transfer of risk from the owner to the Design-Builder occurs. The owner selects the design-builder largely based on expertise through a Request for Qualifications (“RFQ”). The primary driver of this process is not necessarily  price competition on the overall design-build contract price, but rather on the value the contractor can provide. Once the design-builder is chosen, the design-builder delivers the project in two distinct phases.

Under a progressive design-build contract, however, the owner initiates a single construct with a design-builder to design and complete preconstruction tasks. That bill expands authority for the use of progressive design-build by state and local agencies in California. For instance, CalTrans and various water agencies across the Golden State are increasingly adopting the project delivery method. More transportation and water agencies are adopting the project delivery method, according to a recent panel at the 2023 Design-Build Conference and Expo.

You Are a KEY Collaborator – It’s YOUR Project, So Your Input is Sought Throughout the Design Phase

Additionally, Meredith explained it was essential to demonstrate the benefits of progressive design-build and how it had already been successfully implemented in other states. While not strictly a Lean practice, Design-Build does allow for more collaboration for the two teams and lends itself to the possibility of implementing Lean methods. This makes it a great starting point for any team looking to dip their toes into Lean methodology. Construction contracts are usually lengthy and complicated, composed of a wide range of documents In a perfect world, the contract provides the clarity and direction all stakeholders need to move... This public meeting is livestreamed and archived on the Finance Committee Meeting Homepage. The Finance Committee Meeting homepage also provides access to the virtual meeting, schedule, agenda, materials and minutes.

In 2018, Tipton County, a community in north central Indiana, broke ground on one of the most significant County building projects since 1895. Like many communities around the nation, the County needed to replace an aging and overcrowded jail that no longer met their needs. After an unsuccessful attempt using the traditional Design-Bid-Build (DBB) project delivery method, Tipton chose to use the progressive design-build model to support their objectives and budget. Achieving 40 to 70 percent design completion is common and even up to 100 percent in some cases.

In traditional design-build delivery, the owner decides what they want built, and goes to a single company to for both the design of the construction and the execution. Design-build delivery can be elevated through PDB, which is a stepped, or progressive process. In this approach, the owner selects a team based on qualifications or best value, followed by a collaborative process toward a final design and contract price. Key features of PDB include early retention of the design-builder, selection based on qualifications rather than final project cost/price, and delivery of the project in two distinct phases. Phase One includes a budget-level design, while Phase Two includes the completion of the project's design and construction. Metro is planning to employ Progressive Design-Build (PDB), an innovative and potentially cost-efficient construction methodology, to build the light rail line.

There is nothing worse than getting to bid day (I call it “surprise day”) and finding that you have multiple bids above your budget. Design-build gives the owner a high degree of control over the design and, in turn, budget. Where typically UDOT and its consultants would create a baseline and documents to give to the contractor, “now there is no arbitrary design” that “the contractor won’t use,” he said.

Even during construction, visiting designers and contractors commented that the workmanship of plumbing, duct work, and electrical on the back of the modular cells looked like artwork. This helped to expedite the design process and developed several design options. As often happens in the traditional approach, we did not use the previous design to begin with or a computer-generated design option because these do not allow for team interaction. Instead, we began by using simple colored building blocks representing various building components. The team could move the blocks around and physically demonstrate to the team why a component should be located where it is.

With Progressive design-build (PDB), the design-builder team is the major player in terms of design. Owners may or may not retain all intellectual property, including the designs, if they part ways with the design-builder. While PDB has been used for transit and airport projects, there hasn’t been a PDB highway project yet. But issues with the progressive design-build method still remain, said Meredith.

Metro has also been working with the Federal Transit Administration on federal funding and last month received a $600 million grant through the state Transit and Intercity Rail Capital Program (TIRCP). Metro has also been holding community open houses to offer more information about upcoming construction activities and what to expect, small business support programs and introduction of project staff. The Groundbreaking Women in Construction (GWIC) conference is a leading event focusing on empowering women in the construction industry through discussions on leadership, diversity, and career development. To get that bill passed, DBIA gathered a coalition of stakeholders, including various counties, school districts and government agencies. Meredith also engaged in extensive education and outreach, not only within the design-build community but also with committee staff and legislators.